Miami Could See New Office Development Soon

MIAMI—After nearly 2 million square feet of new office space was delivered in 2010, new inventory has since waned. Year-to-date deliveries of new office space has been less than 250,000 square feet—the lowest since 2007—and only 164,000 square feet is still under construction and set to deliver.

So says Jones Lang LaSalle’s third quarter office market report. Of course, a lack of new construction is good news for a market facing a total vacancy rate of 19.1%, with nearly 7 million square feet of vacant space.

“Of all the new buildings delivered in 2010, 1450 Brickell is leading the charge,” Jonathan Kingsley, a senior vice president at JLL, tells GlobeSt.com. “If Brickell Financial Center follows that same pattern of a two- to three-year cycle, then now’s clearly the time to start planning for future office space to be delivered two to four years from now.”

The banking and legal sectors continue to drive demand for office space in Miami’s Central Business District. The CBD’s newest trophy tower, Brickell World Plaza, signed a new 40,000-square-foot long-term lease for global law firm Hogan Lovells. Southeast Financial Tower inked a 23,000-square-foot lease with BCI, one of the strongest banks in Chile.

“The indicators are all positive in terms of Latin American growth, which fuels this area,” Kingsley says. “There's just not a lot of land available anywhere in South Florida particularly if you stay east, and South Florida remains an attractive place for companies to do business and for individuals to find housing. Those dynamics are still holding together nicely.”

Brickell CitiCentre, Swire’s planned mixed use development on Brickell, contains an office component. Kingsley says there’s not much new office development planned beyond that, but a prime development site in Coconut Grove is up for bids. The site currently houses a 70,000-square-foot class B office building on a five-acre site next to the Ritz Carlton Hotel at 2701 South Bayshore Drive.